Tim makes four payments of 3000 at four year intervals starting today (annuity duc). Interest is credited at a nominal interest rate of 6% compounded semiannually for the first 10 years and nominal discount rate of 3% compounded monthly thereafter. Calculate the accumulated value 20 years from now.

Tim makes four payments of 3000 at four year intervals starting today (annuity duc). Interest is credited at a nominal interest rate of 6% compounded semiannually for the first 10 years and nominal discount rate of 3% compounded monthly thereafter. Calculate the accumulated value 20 years from now.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: What is the present value of Nagpada's ordinary annuity of 10-years whose cash flows are $1,500 per…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: you have a 12-year annuity paying $496 quarterly in 10 years when interest is 6.65% compounded…

A: Number of annuity payments = Number of years * time period of Payment = Number of years * Quaterly…

Q: Vusa has invested $420000 in an annuity that pays interest at the rate of 3.6% per annum,…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: If $417.00 is deposited at the end of each year for 6 years into an ordinary annuity earning 4.08%…

A: Here, Yearly Deposit is $417.00 Time Period is 6 years Interest Rate is 4.08% Compounding Period is…

Q: A 11-year annuity pays $1,400 per month, and payments are made at the end of each month. The…

A: The idea of the time value of money (TVM) holds that a quantity of income is valued sooner than it…

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: 1. Present value of annuity when payments are made at the end of year.PV = A * where,PV = Present…

Q: An annuity is paid half-yearly in arrears at a rate of 3000 per annum, for 20 years. The rate of…

A: The Future value of the annuity refers to the sum value of all the payments which is occurred…

Q: In a sequence of 10 annual payments of P2,000 each, the first one is due at the end of 6 years. Find…

A: Calculation of Present Value of Annuity Year end Payment Present value factor at 6% Present…

Q: Regular contributions of $200 are made at the end of each month for five years into a savings…

A: An ordinary annuity involves regular contributions or payments made at the end of each period (in…

Q: A perpetuity-immediate has payments of 10 at the end of year 1, 12 at the end of year 2, and level…

A: The duration of a perpetuity is simply equal to the weighted average time to receive the cash flows,…

Q: Omega Inc. purchased a deffered annuity which pays $23,000 at the beginning of every three months…

A: An annuity is a stream of cash flows that occurs at equal time intervals. This series of cash flows…

Q: Find the present value of the ordinary annuity. Payments of $430 made annually for 13 years at 6%…

A: The time value of money (TVM) is an important concept in finance that reflects the idea that money…

Q: Eric Coleman invested $2500 four times a year in an annuity due at Southern Trust Company for a…

A: The Future Value of Annuity Due is the total future value of each cash flow which is made at the…

Q: PNC's 30-year annuity is scheduled to pay off a loan taken out today at a 5% annual effective…

A: given, year (n) = 30 rate = 5% first annuity at t=10, amount= $10,000 then annuity increase by $5000…

Q: Todd Ring plans to deposit $600 at the end of every 6 months for the next 10 years at 12% interest…

A: The future value of the annuity is calculated when it is to be known how much amount one will…

Q: How much in each of the quarterly installments if rate of interest 10% compounded bi-monthly?

A: A stream of equal cash flows paid or received periodically is termed as annuity. Annuity is either…

Q: Find the present value of a 8-year annuity which pays $660 at the beginning of each quarter for…

A: The present value considers the time value of money It says that the value of money received today…

Q: find the present value of a deferred annuity on a regular payment of 700 pesos monthly for 8 years…

A: Present Value of deferred annuity refers to the present value of that annuity which starts in future…

Q: The effective rate of interest is 6% per annum. Calculate the value at the start of the payment…

A: concept. Future cash flows are discounted to present value using discounting rate of return. this…

Q: Natalia makes deposits in an account earning 6% annual effective at the beginning of each quarter…

A: The objective of the question is to calculate the value of P, which is the increase in the quarterly…

Q: An annuity has $159 beginning of month deposits for 10 years with a rate of interest of 6%…

A: An annuity due is a condition where the contribution is made at beginning of the period for a…

Q: Abdullah deposits OMR 1200 at the end of every year for 20 years and the deposit earns a compound…

A: Future value = Yearly deposit * future value annuity factor @5.33% for 20 years

Q: Find the accumulated value of an annuity due of $500 payable at the beginning of every month for…

A: In annuity due, investments are made at the beginning of each period. Future value of annuity due…

Q: An annuity pays 8 at the end of each year for five years, starting at the end of the 12th year.…

A: Given, Payment made is $8 starting from the end of year 12th. Since payment is starting from the…

Q: In the following ordinary annuity, the interest is compounded with each payment, and the payment is…

A: To calculate the Required payment of sinking fund, PMT function in the excel can be used. PMT(rate,…

Q: Annuities At the end of each quarter, $1000 isplaced into an account that pays 12%,…

A: The future value of ordinary annuity is the group of instalment payment of fixed amount at a certain…

Q: A perpetuity pays $4200 at the end of every month for 11 months of each year. At the end of the 12th…

A: Perpetual refers to the forever transaction. This means an equal amount of cash flow at an equal…

Q: Find the amount accumulated FV in the given annuity account. (Assume end-of-period deposits and…

A: There are two types of annuities, i.e., ordinary annuity and annuity due. An ordinary annuity is a…

Q: An immediate annuity makes monthly payments for 20 years. During the first year, each monthly…

A: An annuity is a payment series that provides an income to the holder in exchange for a lump-sum…

Q: A annuity pays $200 at the end of each month for 5 years and $300 at the end of each month for the…

A: PV of annuity with continuous compounding is to be determined. Here, PMT1 = $200 Number of periods…

Q: The future value is $ (Round to 2 decimal places.)

A: interest rate =6% Period =4 years Future value FACTOR =(1+r)n-1/r Future value FACTOR…

Q: An annuity has payments at the beginning of every three months starting today. The first payment is…

A: An annuity is a payment series that provides the holder with a periodic income in exchange for a…

Q: Consider these two annuities. Annuity 1: $150 invested at the end of each 6 months for 20 years at…

A: As we are dealing investment accounts with periodic deposits, we will use annuity formula. Here we…

Q: Two annuity immediates in perpetuity have a present value of $5,000 and a common effective annual…

A: When the periodic payments are not for a defined time period, it is known as perpetuity. Present…

Q: Find the periodic withdrawals PMT for the given annuity account. (Assume end-of-period withdrawals…

A: GIVEN, PV= $300,000 R=6% N=11 M=12

Question

7. Tim makes four payments of 3000 at four year intervals starting today (annuity duc).
Interest is credited at a nominal interest rate of 6% compounded semiannually for
the first 10 years and nominal discount rate of 3% compounded monthly thereafter.
Calculate the accumulated value 20 years from now.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

There is a perpetuity due in which the payments increase by 5 percent per year, and the present value of the 6’th payment is equal to the present value of the 8’th payment. The first payment is 500 dollars. Find both the effective interest rate and the present value.
The compounding periods and the payment periods are the same for an annuity and for an amortization. Determine the present value of the annuity that will pay the given periodic payments. (Round your final answer to two decimal places.) Periodic payments of $2400 annually for 13 years. The interest is 4% compounded annually.
In a sequence of 10 annual payments of 2,000 pesos each, the first one is due at the end of 6 years. Find the present and future value of the deferred annuity if money is worth 6% compounded annually.
An annuity-due makes payments of $15 every other year, with the first payment beginning immediately. The annuity-due makes ten payments. The nominal annual interest rate compounded semiannually is 5%. Calculate the present value of the annuity due. a. 100.0958 O b. 93.2775 O c. 66.7310 d. 124.3700 O e. 133.4620
Find the future value and the present value of an annuity of 3500 payable atbthe end of each month for three years of the interest rate is (a) 5% compounded annually, and (b) 5% compounded quarterly.
An annuity is paid half-yearly in arrears at a rate of 9000 per annum, for 11 years. The rate of interest is 3% per quarter-year effective. Calculate the accumulation of the annuity at the end of 11 years. Give your answer to two decimal places.
7. Tim makes four payments of 3000 at four year intervals starting today (annuity due). Interest is credited at a nominal interest rate of 6% compounded semiannually for the first 10 years and nominal discount rate of 3% compounded monthly thereafter. Calculate the accumulated value 20 years from now.
Find the present value of an annuity with periodic payments of $2,000, for a period of 10 years at an interest rate of 6%, discounted semiannually
A 13-year annuity pays $1,400 per month, and payments are made at the end of each month. The interest rate is 7 percent compounded monthly for the first six years and 5 percent compounded monthly thereafter. What is the present value of the annuity?
Jason's loan for $8500.00 is repaid by equal payments of $525.00 that are made at the end of every month. If his interest is 11% compounded semi-annually, how much will be paid out of pocket (in total) to repay the loan plus interest?
Don purchases a 20-year annuity-immediate evaluated at an annual effective rate of 5.5%. The first payment will be made at the end of year six in the amount of 2,000. The subsequent payments increase by 100 each year. Calculate the present value of the annuity at purchasing.
Robert wants to have $2,300 at the end of every three months for 8 years. The bank pays 8% interest, compounded quarterly. Robert calculates that the present value of the ordinary annuity is $53,977.16. What would be the present value if payments were to be received at the beginning of every period rather than the end?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS